UPDATE 1-Obama Seeks to Cut Defict by $1.1 Trillion

WASHINGTON (Reuters) - U.S. President Barack
Obama's proposed budget for fiscal 2012 will seek to cut the
record federal deficit by $1.1 trillion over the next 10 years,
White House budget director Jack Lew said Sunday.

Lew, speaking on CNN, said the president was also on track
to halve the budget deficit by the end of his first term in
office, which goes through 2012.

Obama is set to present his budget to Congress Monday.
He intends to get two-thirds of the savings from spending cuts
and one-third from tax revenues, including by closing several
tax loopholes, according to sources familiar with the budget.

A Democratic aide said the budget would reduce Pentagon
spending by $78 billion over five years.

Pentagon cuts would include the C-17 aircraft, the
alternate engine to the Joint Strike Fighter and the Marine
Expeditionary Vehicle that the Defense Department says it
doesn't need.

The $1.1 trillion in savings over the next decade is more
than double the $400 billion that Obama outlined in his State
of the Union address last month as part of a proposed a
five-year spending freeze on non-discretionary domestic
spending.

Obama, a Democrat, and Republicans in Congress have clashed
over how far to go with spending cuts to trim the deficit.
Obama argues that some spending increases are necessary to make
the U.S. economy more competitive. Republicans are pushing for
deeper cuts and oppose any tax hikes.

Republican congressional leaders said Obama's budget
proposals did not go far enough to rein in spending and reduce
the deficit.

"He's going to present a budget tomorrow that will continue
to destroy jobs by spending too much, borrowing too much and
taxing too much," House of Representatives Speaker John Boehner
said on NBC's "Meet the Press."